Hang Seng (HS) has made a low @ 24450 on Oct 29. The day as the DJIA and the S&P500 made one too. The move at HS is more „powerful“ and may complied the onset of a first leg of an impulsiv move up.
If this is the case, HS is showing a series of 1-2`s which will lead to a new ATH well above the 33484 of Jan 29.
But let`s check the move from 18278.8 from 2016-02-08 to the ATH at 33484 at 2018-01-26.
This move is a clear „five-up“ and signals a wave 1 of (V). The correction to 24540 on Oct 30 is a wave 2 correction wich is done and retraced a Fibonacci of ~0.59! This retracement is close to the most common Fibonacci for a wave 2, it is the 0.618! So, the odds are to favor that it is done and a new advance has started at 24540.
The alternate interpretation is, that there one more down sequence is needed to complete the wave 2 correction to or around the 0.618 Fibonacci at 24087 area and thereafter a advance take place.
At the lower timeframe you can observe, that the advance from 24540 is a series of one`s and two`s that are still progressing. But just a solid close above the 27957-28579 (levels of lesser wave 4 degrees) area will manifest the odds, that the new advance is becoming more solid.
A second „indicator“ to judge for abottom in HS is the A/D-Ratio below the chart (first graph). The ratio is down to 0.4890. This is a levelwhich og´ften was the bottom for a new push to the upside. If so, a rise above 27260 with strong and a solid daily close will be a first sign for this These.
One alternate interpretation for HS is that, that the decline is just a wave A correction of a ZigZag-pattern and a wave B up is next to occur,. The most common target for this pattern is the 0.382 Fibonacci and we will abserve the pattern closly to judge which one will become the favor for this index.
Have a great week....
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